The fourth quarter federal buying season officially kicked off on Saturday.

And it’s expected to be as busy as ever. Bloomberg Government estimates agencies will spend about $217 billion between now and Sept. 30. That’s about 31% of the total acquisition spending for fiscal 2023.

Of that, BGov expects agencies to use existing multiple award type contracts, whether they’re governmentwide acquisition contracts like NASA SEWP or the CIO-SP3 vehicles from the National Institutes of Health IT Acquisition and Assessment Center or through the schedules program from the General Services Administration, for about 60% of all spending.

David Berteau, the president of the Professional Services Council, an industry association, said because agencies received 2023 appropriations earlier than in previous years, the fourth quarter may not be record breaking.

“I do think it will be a busy fourth quarter,” Berteau said in an interview. “Non- DoD agencies did better in obligating money in the second quarter and I expect they will do better in the third quarter, which should take the pressure off in the fourth quarter.”

But, Berteau added, it’s not unusual for agencies to have to spend more than 30% of their annual appropriations in the fourth quarter.

“The pressure of fourth quarter spending is different for each agency because of when their money expires. Some have one-year money and some have two-year money and others have no-year money, so that also plays into the decisions,” he said.

At the same time, agencies need to get their orders in quickly for some of the GWACs.

NITAAC’s assisted acquisition services set a deadline of Aug. 1 for agencies to get orders in, otherwise they will not be fulfilled by Sept. 30.

“It takes time to get an acquisition from inception to contract award so we don’t want to have problems there at the end of the year, and you still have a contract that’s not been awarded,” said Ricky Clark, the deputy director at NITAAC during the recent Centre Law and Consulting Annual Review. “For us, that deadline is mandatory for us to process as needed.”

GSA’s Assisted Acquisition Services has issued a similar deadline in the past as well. It’s unclear what their drop dead order deadline is this year.

Other GWACS, like NASA SEWP, can take orders up to Sept. 30 at midnight.

The point being contractors and agencies alike should expect a busy next three months.

While contractors will watch the laundry list of assorted multiple award contracts they’re on via SAM.gov, assuming it’s working and not down for technical problems like we’ve seen a bit too often recently (and have you heard me complain lately about the lack of transparency of these MACs and GWACs? If not, now you have), the other big acquisition story is NITAAC’s CIO-SP4.

If you missed the news last week, shame on you. The Government Accountability Office upheld 98 protests of the phase 1 evaluation. It’s unclear what that means, except the $50 billion GWAC continues to face major challenges to get to final award.

There probably are dozens of other major contracts industry is closely watching for awards in the fourth quarter as well, including the State Department’s $8 billion EVOLVE multiple award contract, the Homeland Security Department’s FirstSource III small business contract and the Army’s $7.9 billion Common Hardware System-6 (CHS-6) vehicle.

At the same time, agencies are preparing a boat load of solicitations for early 2024. Here are a few of the ones many companies are following, though it is not intended to be a complete list by any means:

OASIS, Alliant, oh my!

If you are a professional services firm and haven’t been living under a rock for the past year, you probably know the General Services Administration released all six solicitations for the OASIS+ multiple award contract. For the rest of you, OASIS+ is the follow-on contract to the highly success OASIS multiple award contract. Since 2015, agencies have obligated almost $64 billion across OASIS, OASIS small business and OASIS 8(a).

What you need to know: Five small business pools and one unrestricted. Due date for proposals is Sept. 13 — it’s a good bet that date will be extended a few times before proposals are actually really, truly due. Questions about the solicitation are due by July 6. This 10-year contract has no ceiling. GSA made 12 significant changes to the request for proposals from the March 2023 draft solicitation.

Background: My interview from April with Tiffany Hixson, the assistant commissioner for the Office of Professional Services and Human Capital Categories in the GSA’s Federal Acquisition Service. She goes into good detail about the OASIS+ acquisition strategy and how they are trying their best to stay out of protest purgatory.

The Alliant 3 solicitation is still a ways away. GSA wrote on its Interact site that it expects to release the final RFP in spring 2024 after issuing a second draft RFP before the end of calendar year 2023.

What you need to know: Alliant 3 is the follow-on to the highly popular Alliant 2 contract. GSA is knee-deep in acquisition strategy and planning mode, having issued a draft RFP in last October. GSA wrote June 28 that “as a result of the feedback we received from the first draft RFP, one-on-one listening sessions and other factors, changes were made to the solicitation that warrant the release of a full second draft RFP…”

Background: Alliant 2 continues to be among the most successful GWACs ever. GSA dropped the other shoe in June extending the order date under the vehicle by five years to 2028. This comes after it increased the ceiling of Alliant 2 to $75 billion last August. Since 2018, agencies have obligated almost $19 billion through Alliant 2.

Small business contractors also will be waiting a bit longer for the final set of RFPs under the Polaris GWAC.

What you need to know: An April Court of Federal Claims decision threw GSA’s plan for Polaris into turmoil. GSA now says it’s still figuring out how to respond to the court’s decision and will eventually issue an amendment to Polaris. It offered no timeline nor insight into what that amendment would include or address beyond what the court recommended.

Background: Polaris was supposed to be the small business vehicle that made up for the missteps with Alliant Small Business GWAC that fell apart in 2020. Now despite Polaris delays and not having Alliant SB in place, GSA’s other small business GWACs have filled the void. 8(a) STARS III has received over $1 billion in obligations since 2021 and agencies have obligated more than $1.2 billion since 2018.

From the “this just in category,” GSA released market research for quantum cryptography on June 26.

What you need to know: This request for information is taking the temperature of the state of the market for products and services. GSA specifically is looking for short answer feedback on eight specific questions, including:

• Can your organization provide any PQC related services and/or products?
• Does your organization currently have a contract to provide any federal, state, local or tribal entities with any specific services and/or products, related to tools and services regarding automated PQC analysis and planning?
• Does your organization have any PQC related services and/or products that should be added to federal, state, local or tribal contracts?
• Does your organization have any PQC related services and/or products currently under development that are not yet ready to be added to federal, state, local or tribal contracts?

Due date for comments is July 11.

Background: The White House’s May 2021 cyber executive order called on agencies to prepare for the future of cybersecurity. The May 2022 National Security Memorandum identified key steps needed to maintain a competitive advantage in quantum information science, while mitigating the risks of quantum computers to the nation’s cyber, economic and national security. The RFI helps further the procurement discussion about the products and services agencies buy and how they will be prepared for the post-quantum world.

From the “this just in category, part 2,” GSA issued a new request for information to change how vendors through their schedule contract sets prices for cloud services, including infrastructure- and platform-as-a-service GSA called the RFI term-based cloud services pricing and invoicing practices.

What you need to know: This RFI is focused solely on schedule contractors. It’s unclear if GSA released this broadly or just through its e-Buy platform (now about that soap box…), since Google and SAM.gov searches came up with no results. The Coalition for Government Procurement gets the credit for alerting its members to the RFI. GSA wrote in the RFI, “Software delivery methods have changed over the years. Pricing for software has become complex, and depending on how the software is invoiced there can be a significant difference in pricing. The information received in response to this RFI will be used to explore options to align the Multiple Award Schedule (MAS) with industry practices for pricing and invoicing term-based software.”

The RFI asks five basic questions about how companies price and invoice their software or other cloud services on the schedules compared to commercial practices.

It’s unclear when the due date is for responses. The RFI came out on June 23 so figure sometime in mid-July.

Background: To their credit, GSA has been at the forefront of trying to fix how the government buys and pays for cloud services. Unlike most commercial organizations, the government can’t follow the “pay by the drink” approach. The problem, of course, is the Anti-Deficiency Act. In December 2021, GSA released a final cloud buying policy to let agencies buy cloud services using a consumption-based pricing formula. But it seems that this policy hasn’t had the intended effect GSA wanted and now is looking at ways to change the schedules program itself.

Services in your SEWP

SEWP V is almost two full years from expiring, but the folks in the program office have a plan for the sixth generation IT GWAC.

What you need to know: SEWP VI will be like no other iteration of this ever-growing contract. Joanne Woytek, SEWP program manager, said at the recent Centre Law and Consulting annual review event that the current approach is for the vehicle to have three pools: One contains essentially the same offerings as SEWP V; the second is enterprise-wide IT services;  the third is more task-oriented around IT services for information and communications technologies and audio/visual requirements.

She said NASA’s plan is to release a draft SEWP VI RFP this summer, by August at the latest, and then have an industry day in the fall.

“Then we go into hiding to develop the final RFP and have that out early to mid-next year,” she said.

The award timeline is for May 2025.

Background: SEWP V includes 142 contract holders, more than 9,300 products and services and awards more than $8 billion a year in total task orders. Woytek estimates SEWP V may reach $10 billion or even $12 billion when 2023 is all said and done.  Check out the upcoming contract guide from Federal News Network on SEWP V.

Acquisitions to watch from FBI, IRS and VA

The FBI’s IT Supplies and Support Services (ITSSS-2) second generation blanket purchase agreement solicitation is out as of last Friday.

What you need to know: Remember that soapbox about transparency I mentioned earlier? Well here is a perfect example of why this is a problem. The FBI, working through GSA, released the request for quotes on June 30 through E-Buy, meaning only vendors on the GSA schedule can bid on it. And no other vendor, or reporter for that case, can easily even look at what the FBI is asking for. The FBI stated in a notice on SAM.gov that it’s giving vendors roughly a month to submit bids, due by July 31, and expects to make an award by December.

Background: The FBI restarted the follow-on to this contract — first awarded in 2010 — in February, pushing the draft phase, three different industry feedback sessions and the final release of the RFQ through the process in about six months. The FBI awarded the current ITSS BPA to 46 companies 13 years ago with a $30 billion ceiling. The agency expected ITSSS to be an eight year contract, but had to extend it by five-plus years now for an assortment of reasons, including having to move the acquisition process to GSA in December 2021 because of contracting workforce staffing issues and then pulling it back from GSA in February to manage the contract itself.

The IRS is taking the first step to buy a commercial contract writing system. The Analytics, Research and Technology (ART) Division is looking to replace a legacy system that combines both commercial and customized systems based on a SAP system.

What you need to know: The RFI comes as part of the IRS’s implementation of the Promoting Rigorous and Innovative Cost Efficiencies for Federal Procurement and Acquisitions (PRICE Act), which calls for system modernization. The PRICE Act established the objective of “modernized data analytics, and advanced technologies that allow decision making to occur in a more friction-free buying environment and improve customer experience.” The IRS’ end goal is to have a single, integrated system that supports the complete acquisition lifecycle workflow through a commercial-off-the-shelf (COTS) product. Comments on the RFI are due by July 24.

Background: This is another example of how the IRS is trying to bring innovation and system modernization to its employees. Agencies have struggled to buy commercial contract writing systems, with the Army and the Navy as recent examples, making the IRS’ effort one to watch for sure in 2024.

The Department of Veterans Affairs is taking another run at modernizing the system that runs its supply chain. It released a RFP on June 29 hopefully heeding the lessons learned of the past almost 20 years.

What you need to know: VA is looking to do a single award, indefinite delivery, indefinite quantity (IDIQ) contract for 10 years. It plans to take “a system-of-systems approach utilizing existing modular technologies to meet the government’s various objectives. This system-of-systems approach reinforced the government’s need for a single system integrator with the capability to not only provide these various technologies, but also manage the extremely complex integration and implementation into VA’s intricate enterprise environment.” Proposals are due July 18.

Background: This is the fifth attempt since 2004 to bring new technology to manage VA’s supply chain. In 2018, VA tried to use the Defense Logistics Agency known as the Defense Medical Logistics Standard Support (DMLSS), only to run into problems and eventually give up last December. This latest effort to attempt to consolidate and integrate approximately 63 disparate systems across 171 sites to manage VA’s supply chain.

You can’t tune into a webinar, go to a conference or listen to a speech by a federal technology executive these days without them slipping in a mention of generative artificial intelligence, particularly ChatGPT.

Yes, it’s the latest buzzword to join the litany of past excitement over cloud computing, robotics process automation and most recently, zero trust.

But unlike cloud or RPA or even zero trust, generative AI is striking apprehension in the hearts of federal officials.

“I think that anybody who’s fired up ChatGPT, and I would be one of the people who’s used it today, I think over the last three to four months with our interactions, we’ve reached some sort of inflection point that we don’t even understand. I think that to try to develop a strategy that’s going to help you long term while really not understanding what’s going on right now, or the speed at which that goes, I think keeping up with that is the real challenge for us,” said Katie Baynes, the deputy chief science data officer in NASA’s Science Mission Directorate, at the recent GITEC summit. “I think partnering with folks who are keeping up and doing cutting edge work has really been the way we mitigate that challenge.”

The newness and desire to better understand how these capabilities work that Baynes talked about is becoming a common theme among agencies, and thus driving initial policy decisions.

New policy from GSA

The most recent one comes from the General Services Administration. It issued an instructional letter (IL) to provide an interim policy for controlled access to generative AI large language models (LLMs) from the GSA network and government furnished equipment (GFE).

GSA chose not to make the actual three-page instructional letter public. But a GSA spokesperson said in an email to Federal News Network that the “interim policy provides guidance for responsible use of generative AI LLM by employees and contractors with access to GSA systems and provides initial guidelines for what’s appropriate and what’s not (e.g., inputting nonpublic information). Our goal is to continue to ensure that GSA has overall policies in place to help ensure responsible use of software tools by employees and contractors.”

Federal News Network obtained a copy of the IL signed out June 9 by David Shive, GSA’s chief information officer, and it spells out the type of concerns agencies leaders have been saying publicly and privately for much of the past few months.

“Access to publicly available, third-party generative AI LLM endpoints and tools shall be blocked from the GSA network and GFE devices,” the letter stated. “Exceptions will be made for research (relevant to the role, position or organization of the requestor) and non-sensitive uses involving data inputs already in the public domain and generalized queries. Exceptions require completing [a] request form detailing intended usage and acknowledgement of GSA’s IT general rules of behavior to not expose internal federal data.”

Shive said in the IL that non-public data such as work products, email, controlled unclassified information and other similar information cannot be disclosed as inputs for LLM prompts.

“Deployment and use of locally deployed LLMs, such as Alpaca or Open-LLaMA on GFE shall abide by GSA IT standards profile,” the letter stated. “GSA-deployed and managed LLMs shall be assessed and authorized to operate by GSA and require specific authorizations to handle personal identifiable information; have privileged access to GSA systems; or transfer data to systems that are not authorized to operate by the GSA.”

Finally, GSA’s letter also tells users that using LLMs for generating software code should be limited to publicly available code only, and code in GSA’s repository should not be inputted into publicly available LLMs.

“The output from LLMs used to generate code or publishable material shall be manually reviewed by the approved user for accuracy, functional effectiveness and suitability, and intellectual property, including copyrights and trademarks, terms of service or end-user license agreements as LLMs may have been trained on data that AI providers may not have had full legal rights to use,” the letter stated. “GSA performs electronic monitoring of internet communications traffic, including publicly available LLMs.”

EPA, HHS’s ACF join discussion

GSA’s instructional letter is one of several similar policy-like documents issued by agencies over the last few weeks.

The Environmental Protection Agency in early May sent a note to staff saying it was blocking ChatGPT, OpenAI and similar sites.

EPA’s Office of Mission Support, according to the email obtained by Politico, described its policy as an “interim decision,” and that the EPA continues to analyze AI tools and will follow up with a final decision on these tools.

“EPA is currently assessing potential legal, privacy and cybersecurity concerns as releasing information to AI tools could lead to potential data breaches, identity theft, financial fraud or inadvertent release of privileged information,” the EPA memo stated.

A few weeks later, Kevin Duvall, the acting CIO and chief technology officer for the Administration of Children and Families in the Department of Health and Human Services, issued a policy that tries to find the middle ground.

“I think it is important for organizations to take a balanced approach to helping employees navigate appropriate and inappropriate uses in the federal context. We are at the edge of a new frontier that is still just getting started,” Duvall wrote on LinkedIn. “At the Administration for Children and Families (ACF), we are balancing risk, while still exploring this technology and its potential to empower federal employees to serve citizens even better. This interim policy helps us explicitly address some ‘dos’ and ‘don’ts’ while this space matures. I hope this can help others as they navigate this technology.”

HHS ACF’s policy outlines six considerations for employees as they use or considering using chatbots and generative AI tools. These include some common focus areas like don’t share PII or personal health data as well as workforce education about how these tools work and don’t rely on the capabilities for decision making purposes.

These policies — there may be others from more agencies — as well as a new AI task force from the Homeland Security Department come as the White House Office of Science and Technology Policy (OSTP), in a request for information released May 23, is asking the public to provide this input, as part of an upcoming National AI Strategy on how agencies could benefit from generative AI tools to meet their mission. OSTP is accepting comments through July 7.

Leveling the playing field

The real or potential use of generative AI is seeping into other parts of the government. The Interior Department already is starting to see some impact.

“ChatGPT took us by storm. We were off doing our business cases for pilots, and we had our plans, and then all of a sudden there was ChatGPT. Our grant recipients and our contract vendors were like, ‘guess what, we can use this to write our applications and we can use this to get a higher score to finally get funding. Wouldn’t that be nice to level the playing field.’ We were like, ‘Oh my goodness,’” said Andrea Brandon, the deputy assistant secretary for budget, finance, grants and acquisition for the Interior Department. “We don’t have any government policy yet that tells them they can’t use it. We are starting to see an uptick in the applications coming in from organizations that historically been trying and trying to get a grant, and then here is ChatGPT helping them write it, and they don’t need to hire a grant writer. Now they can ask some questions and get it right.”

Brandon said they are discussing the use of ChatGPT because they can hire grant writers so why can’t they use these tools? At the same time, it could mean Interior, or any agency for that matter, could get 1,000 grant applications where once it received only 400. Brandon said having the staff to review the applications would be a huge challenge and likely delay the awarding of the money.

“The organizations that are using ChatGPT currently are finding that it’s actually cheaper to use ChatGPT than to hire a grant writer. Some organizations never had the funds to write a grant right or to hire a grant writer. Whether we’re going to still allow ChatGPT in the future or what have you, we discussed having a policy, which we’re all just discussing it. We’ll take that into consideration,” she said. “We never told applicants that they couldn’t use grant writers. So I don’t know, maybe we won’t tell them they can’t use ChatGPT either so maybe they’ll be able to still use it. I don’t know. But currently, it’s leveling the playing field, they are able to use it.”

It’s clear the amount of uncertainty about generative AI and how it could impact mission areas across the government is causing agencies to put the brakes on the capabilities.

And probably rightly so as generative AI, like any new technology, comes with a host of unknowns and buzz from industry as every company throws the term in their marketing materials.

The question comes back to how quickly will agency leaders become comfortable with the new capabilities and when will OMB publish some basic guidance to help agencies manage the excitement?  Until then, the inconsistent application of generative AI will cause more challenges than they solve.

The build up to the Defense Enterprise Office Solutions contract vehicle, starting in 2015, was full of anticipation and promise.

Before the award of this contract that many estimated to be worth $8 billion-to-$10 billion, Defense Department technology and program executives said the effort will “better align our resources,” it has the “potential to dramatically change the way the Army does business,” and it would “eliminate some barriers to collaboration, and also help to eliminate duplicative spending.”

The Department of Navy was writing its multibillion-dollar Next Generation Enterprise Network (NGEN) contract at the time, and specifically took steps so it could easily move its email and collaboration capabilities to DEOS.

There even was talk of using DEOS as a model for a civilian agency version, called CEOS.

But here we are eight years after the Defense Information Systems Agency first came up with the idea, and two-plus years since the 10-year, $4.4 billion award to General Dynamics Information Technology (GDIT) for implementation services, DEOS is struggling to live up to expectations.

Former DoD executives and industry sources say the program isn’t necessarily a failure and is providing some value. But the shortcomings of DEOS is a case of how time and circumstances may have overtaken the initial rationale of the program, leaving many of the services to have found better and cheaper ways to accomplish the same goals.

“How people are using office and collaboration tools now versus before the pandemic is hugely different. It was hard when we were developing DEOS to foresee how much things would change,” said Alan Thomas, the former commissioner of the Federal Acquisition Service in the General Services Administration, which worked with DISA to run the acquisition. “We all know how the ground shifted under the DEOS program because of the pandemic, maybe in more ways than we saw in a lot of other areas, as we were all driven out of the office.”

Multiple O365 tenants emerged

DoD data about DEOS shows it hasn’t lived up to expectations. Back in 2018, DISA hoped to start migrating the department’s first users — about 1.5 million of them — within 18 months after award.

Navy Cmdr. Jessica McNulty, a DoD spokesperson, said under the DEOS blanket purchase agreement, services and agencies have bought about 98,000 subscription licenses and 323,000 Azure Active Directory Premium 2 (AADP2) licenses for Office 365.

McNulty added in all there are 1.97 million subscription licenses sold since 2020.

The difference, according to an industry source with knowledge of how DEOS works, is the 98,000 number is likely only for the joint tenant — the DISA-managed instance of O365 that serves users in DoD’s “fourth estate,” while the 1.97 million number includes the assorted other tenants the military services wound up creating, which, in many ways, was what DoD was attempting to avoid by creating the DEOS contract in the first place.

“DEOS was intended to be one-stop shop and the ‘be all, end all’ for these collaboration tools. But what happened was the services stood up these other tenants as well as several other contracts outside of DEOS,” said the source, who requested anonymity because their company still does business with DoD. “DEOS ended up being one of many contracts, and like many DISA programs, the ‘build it and they will come’ philosophy didn’t work well.”

McNulty confirmed there are 14 unclassified O365 tenants across DoD.

“We’ve allowed for this many tenants given the desire by the military services and others to manage their own DoD O365 environments, based on their concerns about oversight of their own data and security,” she said. “However, now that we’re nearly two years into our impact level 5 (IL5) DoD O365 journey, we’ve all recognized that 14 tenants is too many; at the same time, one is too few, as it would likely be the largest O365 tenant in the world.  We are working to reach a balance between the two numbers in the future.”

Pricing under DEOS is 20% higher

At the same time, she said DoD also is planning to authorize the O365 instance in the IL6 or the classified environment where it plans a single, joint tenant.

The industry source said DoD’s multiple unclassified tenants had integration and interoperability issues because the services set up different rules and requirements.

It seems that the DoD Chief Information Officer, John Sherman, is trying to avoid the same mistakes with the classified tenant.

At the heart of the shortcomings with DEOS isn’t the multiple tenants or the inconsistent implementation of O365, it’s the price of the licenses DISA and its industry partner Dell are selling through the BPA.

Multiple former government sources and industry experts say the price negotiated through the DEOS contract for O365 licenses is as much as 20% higher than what the services and Defense agencies could get through the Navy enterprise software initiative (ESI) contract.

A former DoD technology executive, who requested anonymity because their current company does business with the government, said the overhead of the DEOS program was “exceptionally absurd and didn’t add value.”

“DEOS was put in place before the Commercial Virtual Remote (CVR) platform, and before they knew how folks would consume the platform. They went massively huge before having any data about how users would consume software-as-a-service,” the former executive said. “Why they didn’t start small and then grow it is a big question. But now they are eating their results.”

Offering monthly licenses drove costs up

Sources say the huge markup is based on how DoD thought it wanted to use the licenses in 2016 or 2017.

“GSA and DoD only wanted to buy licenses on a monthly basis because they wanted a rebate if people leave or move to a new job. But that approach causes Dell to pay up front for a years’ worth of licenses,” the industry source said. “GSA was not flexible with this approach, so Dell is having to pay upfront for all those licenses, which caused the price to be much higher than what Microsoft was charging others.”

The former DoD executive said the price for O365 licenses was “insane,” and the services were required to buy licenses for every employee whether or not they were using the product in the same way.

All of the military services took steps to move away from DEOS or find cheaper Microsoft licenses.

Air Force CIO Lauren Knausenberger said recently one of the ways she found to save money was by redoing several different deals with software vendors.

“We renegotiated a number of enterprise software deals, where we saved very large amounts of money. This year, we renegotiated some of our Office 365 licenses and that actually took care of a lot of our under use going into the year. There are places where we had to get smarter with negotiations, and then there were places where we had to cut. There were places where we just had to find the money,” Knausenberger said.

The Army went in a different direction last October by moving 250,000 active duty enlisted soldiers to Google Workspace.

Sources say that decision helped convince Microsoft to drop its price for O365 licenses by half in some cases on other non-DEOS contracts.

The idea, according to sources, is new recruits know how to use Google Workspace, it’s more intuitive and in some ways, provides better security.

The Navy launched Operation Flank Speed, where it plans to move more than 650,000 sailors, seamen and Marines into the O365 environment.

Microsoft declined to comment for the story. GDIT also declined to comment for the story.

“What the Navy did was they looked at this DEOS problem and perhaps learned from previous contracts, or did more research and decided to buy on yearly basis and not get up-charged,” said another former DoD official with knowledge of DISA and the DEOS contract. “The former Army CIO [Raj Iyer] looked for alternatives and one was Google because there are some junior service members who don’t use O365 on a daily basis as part of their primary mission. It didn’t make sense to pay for the full suite for them. I do think the Army looked at this problem and made innovative decisions. Hopefully other services are looking at that as well, because they have to answer the question: Does every service member require the Cadillac of IT, or can they do with something to get email, to receive notifications?”

Joint tenant expansion doesn’t seem likely

McNulty, the DoD spokesperson, said the price differences between DEOS and the Navy’s ESI did not affect the implementation of DEOS.

“The DEOS BPA and the Navy ESI provide different models to purchase O365 licenses. The Office of the DoD CIO (OCIO) does not provide differentiating guidance on licensing,” she said. “However, OCIO must ensure every DoD component keeps current appropriate licenses to maintain O365 collaboration capabilities. For mission partners that have consistent licensing requirements year-over-year, the Navy contract offers cost savings due to the annual payment-up-front model. The department has various options available to mission partners for purchasing licenses and savings, which will vary based on the contract option they chose that best meets their mission needs.”

McNulty said DoD has no plans to end the DEOS BPA. At the same time, expanding the unclassified joint tenant version of DEOS also doesn’t seem to be a major priority.

“DoD’s main priority for 2023 is to develop, deliver and maintain the classified DOD O365 platform,” she said. “Other priorities include continuing ongoing sustainment of the unclassified joint environment and evolution of disrupted, disconnected, intermittent and low-bandwidth (DDIL) environment. Lastly, DoD is continuing to assist mission partners in optimizing the BPA for services they may need including data migrations, engineering support and zero trust modernization.”

There was no mention of expanding the number of users under DEOS despite specifically being asked that question.

Sources say the expansion most likely will come through the Navy ESI contract because the idea of paying for monthly licenses, especially if the markup is as much as 20%, isn’t tenable for the services.

“It sounds like the DoD CIO is saying ‘the Navy contract is much cheaper, but we are not telling you what to do,’” the industry source said. “It sounds like they don’t want to throw GSA under the bus, but it’s clear no one wants a monthly license and to have to pay that premium.”

Multiple sources agreed that part of the problem with DEOS, and in many ways many of DISA’s offerings, has to do with the time it takes to develop the requirements, award the contract, getting through protests, and then implementation. Due to that elongated timeline, particularly in the case of DEOS, the technology environment changes, leaving customers wanting something different than what DISA is offering.

“There is an element that agencies have more experience with the cloud now that they are several years into it. DISA completed all transitions during COVID to DEOS, but more than that, it looks to me like DISA made poor assumptions up front about what kinds of pricing models they would get from vendors,” the second former DoD executive said. “I think they thought it was a good assumption that if you can get the licenses on a monthly basis, it should be cheaper. But clearly they didn’t do enough research. It seems like the government made poor assumptions on what would be a good pricing model, and that should’ve been one of those things teased out of market research.”

McNulty said DoD recognized how the pandemic changed the adoption of O365 capabilities. But the DEOS BPA has had only one administrative modification to date.

The General Services Administration’s inspector general just released at least its sixth report on the Transactional Data Reporting (TDR) program since 2015.

The IG, once again, took the program to task for deficiencies that “clearly demonstrate that the TDR pilot has not been a success and point to significant problems that must be corrected before its expansion across the MAS program.”

The response from the Federal Acquisition Service, like many times over the past almost eight years, indignant, frustrated and unwavering. GSA seems less and less bothered by the IG’s criticisms and more committed than ever to continue to evolve TDR.

It’s clear both parties are dug into their positions and are at a stalemate of sorts. The IG released three reports in calendar year 2022 where TDR was a major focus areas in some way, shape or form. GSA continues its plan to expand TDR to other parts of the schedules program and improve the data quality of the efforts.

So the question becomes when you have two immovable forces, is there a way they can find common ground around how to ensure the schedules program is providing the best prices to agency customers?

Agree on the end goal?

GSA launched TDR in 2016 to find a way to move away from the use of the price reduction clause (PRC) and commercial services practices, which vendors hate and agencies find less and less valuable.

“…GSA is adopting a more dynamic market driven pricing model, where vendors submit prices paid by government customers through a new Transactional Data Reporting clause and the government uses this data, along with other pricing information, to ensure a vendor’s offered price is competitive relative to other vendors selling the same or similar items or services,” GSA wrote back in the 2016 final rule.

Roger Waldron, the president of the Coalition for Government Procurement, summed up the problem TDR is trying to solve much more succinctly.

“It is time for GSA to finally move away from the current CSP and PRC, which are the pillars of an outdated 1980s multiple awards schedule pricing policy that increases costs, creates barriers to entry and limits competition both in the federal and commercial markets,” Waldron said in an email to Federal News Network. “Transactional Data Reporting is the next logical step in the continuing evolution of the FSS program. It focuses GSA on relevant, market-driven transactional data that will support category management.”

GSA, the IG and industry agree TDR is far from perfect.

The IG’s findings in this latest report mirror many of the same concerns auditors raised previously. The data is unreliable.

“We found that the data reported for $12.6 billion of these sales (87 percent) cannot be used for meaningful price analysis,” the IG stated. “This data is unusable because it lacks essential information, such as standardized part numbers or descriptions that identify the services provided.”

The IG also doesn’t agree with GSA’s own TDR evaluation, calling the agency’s 2020 findings “misleading” and having “significant deficiencies” with the evaluation of the metrics.

The IG concluded, once again, GSA should end the TDR pilot through an exit strategy or take “significant actions” to fix the problems.

Ending TDR will not be easy

Industry and government sources say GSA and vendors are too invested in the program and can’t easily pull the plug.

The fact is GSA will not, and really can’t, end the TDR pilot. GSA would have to renegotiate commercial service prices with every contractor who is in the TDR pilot. That time and cost would be too high, and it’s assuming companies would want to go through these renegotiations. Sources said it’s likely a lot of these companies wouldn’t stay on schedule further exacerbating federal industrial base challenges.

GSA said it continues to improve TDR. It said in the response to the IG that the data quality is getting better. Since 2019, the data quality for products when compared to GSA Advantaged improved to 83.3% from 43.4%.

Jeff Koses, the senior procurement executive at GSA, said on last Tuesday at the Coalition’s spring conference that the data quality improvements extend beyond just comparing prices, but also to data usage, workforce training and sales matching.

“If we go back to the beginning, we said that there were four goals that we thought we could accomplish through transactional data reporting. First, lowering prices. I’d say that we have seen a ton of evidence over the last several years, and every time we’ve looked at it, we’ve seen that the prices for prime contractor who use TDR data their market position on it is better than the prices of the contractors where we are using the old regulatory compliance controls. Second, lowering the reporting burden. This is an area where we have spotted an opportunity to reduce regulatory burden, and we’ve seen where contractors have the choice of moving over to TDR compliance,” Koses said. “Third was supporting small business. The data demonstrates that the contractors who are submitting TDR data are using the data for understanding of their market position are more successful, are having a higher sales growth, than under the traditional program. And finally, our fourth objective was getting better at using market intelligence to drive better acquisition outcomes. My office did an evaluation almost three years ago, we said there needs to be improvement to get space. The series of IG reports amounts to there needs to be an improvement in that space, particularly contracting officer usage, and we all agree on that. It’s been continued progress, more benefits are emerging from TDR.”

The other piece that the IG doesn’t seem to consider is TDR’s own evolution. Just because GSA set out a series of goals in 2015, it doesn’t mean eight years later those goals are the same.

Larry Allen, president of Allen Federal Business Partners, who was against TDR initially but has come around to see its benefits, said the IG doesn’t seem to understand the goal of the pilot.

“The IG seems to believe that TDR data was being collected primarily for use as a negotiation tool. It was not.  TDR data was originally supposed to be used to allow federal agencies to make good buying decisions AFTER a schedule contract had been awarded,” Allen said. “The whole purpose of the TDR program was to get away from contractor-supplied pricing information to determine the price reasonableness of a schedule item. Contracting officers were, and are, supposed to use market research as their primary means of determining price reasonableness. I repeat: TDR data was to be used for price comparisons AFTER award, not to determine price reasonableness during negotiations. Why have a TDR program that relied on contractor-supplied pricing information? That’s the traditional route for getting a schedule.”

Financial incentives not to change

Waldron added TDR also is trying to address the long-standing belief that price only really matters at the task order level when quantity discounts and other factors come into play.

“Under today’s multiple award schedule program, price and value fundamentally are driven by competition for agency specific requirements at the order level.  TDR recognizes that reality by collecting data that will assist all agencies in better managing requirements and achieving best value results utilizing the program,” he said.

Of course underlying all of this is the fact the IG benefits greatly from the PRC/CSP approach.

Multiple government and former GSA sources confirmed that the IG has financial reasons not to move away from the current approaches. Sources said the IG justifies its personnel count as well as funding by doing these investigations into potential PRC/CSP violations.

By moving fully to TDR, GSA’s IG potentially would have a smaller need to review price reasonableness and perform similar audits, and therefore would need a smaller budget.

The more the IG  documents the savings it has delivered in excess of its budget, the more inclined Congress is to support budget increase. GSA’s IG said it “saved” more than $282 million in 2022 through pre-award audits of the schedules program. The issue, of course, is these are pre-award audits so GSA never spent the money in the first place, so the savings are theoretical. It also assumes GSA agrees with the IGs recommendations and they were timely.

If GSA goes all in on with TDR, sources say the need for pre or post award audits is all but eliminated. So the question becomes how does the IG deliver value with respect to oversight of the schedule contract?

The IG tells Congress for every dollar lawmakers allocate, their office provide $20 in savings. That metric, sources say, would be severely impacted.

The IG’s budget request for 2024 is $78.6 million, up from $74.5 million in 2023 and up $10 million since 2020.

At the same time, let’s be clear, the IG’s budget isn’t necessarily driving their oversight of TDR as the problems they are finding are real. It’s more about the unwillingness to find a compromise that would work for all parties involved.

Improvement ideas

The IG’s recommendations are either to terminate the pilot or for GSA to take six steps, including conducting a comprehensive assessment of all TDR data; verifying the accuracy and completeness of all TDR data and implementing a verification process to ensure that TDR data is accurate and complete when it is submitted by contractors.

Mark Lee, the assistant commissioner of the Office of Policy and Compliance in GSA’s Federal Acquisition Service, said among the steps GSA is taking are completing the verification and validation of TDR data.

“Between our FAS sales reporting portal and the FAS Common Catalog Platform, we’re continuing to do a comprehensive review of all TDR data,” Lee said at the Coalition’s event. “We’re continuing to monitor compliance with TDR reporting requirements from our contracting officers and our industrial operation analysts. We’re updating our 4P report along with our compliance and pricing report to make sure that our CO’s are utilizing the TDR data.”

Koses added the IG is correct to say TDR needs to be improved, but just because it’s not as good as it could be, it needs to be terminated.

Industry experts echoed Koses and GSA’s feelings about TDR.

“While industry may believe that this system has its flaws, the agency has nevertheless moved ahead at the program level to develop price analysis capabilities that they were supposed to develop to negotiate TDR contracts. The pricing tool is also used today for contract mods. I do not see where the IG commented on this fact, though it is a significant part of today’s schedule program,” Allen said. “TDR data can be used as a market research tool to determine whether pricing submitted by new offerors for items that are the same or similar to items already on schedule is fair and reasonable. Again, though, GSA has already developed a pricing tool that seems to accomplish this task. TDR could be an additional resource, but, as the IG report adeptly points out, that information may not be useable. It was, however, NEVER MEANT to be useable as a primary way to determine Schedule price reasonableness. The whole point of the TDR pilot was to get away from contractor-supplied data and allow contracting officers to conduct market research.”

It seems like time to lock GSA leadership and the IG in a room together with pizza, coffee and whatever else they like and not let them out until they find a way forward. Otherwise, the current disconnect will continue to squander precious time and resources for both sides of the TDR debate.

Leslie Beavers is an Air Force brigadier general and spent the last three years running the Defense Department’s enterprise capabilities office for the Office of the Under Secretary of Defense for Intelligence and Security.

Michael Chappell is a systems engineer by training and spent most of his career working for federal contractors.

While it seems Beavers and Chappell come from different worlds, both are taking on similar new roles.

DoD named Beavers as its new principal deputy chief information officer, replacing Kelly Fletcher, who left in October to be the State Department’s CIO.

Meanwhile, Chappell is the new CIO at the Army’s Program Executive Office Enterprise Information Systems (PEO-EIS). This is a semi-new role as PEO-EIS hasn’t had a formal CIO 2018 when it reorganized under two assistant PEO portfolios.

These are two of the latest shuffling of chairs in the federal technology community.

Along with the DoD, Army PEO-EIS, the General Services Administration, Special Operations Command and the National Institutes of Health all saw changes over the past few weeks.

Let’s start with DoD where Beavers comes to the CIO shop starting on May 8. Dave McKeown had been acting principal deputy CIO since Fletcher left and will resume his duties as DoD chief information security officer and deputy CIO for cybersecurity.

“I’d like to welcome Leslie to the DoD CIO! Her most recent experience in OUSD(I&S) as the director of intelligence surveillance and reconnaissance enterprise capabilities leading the Defense Intelligence Digital Transformation Campaign Plan will enable her to hit the ground running on initiatives such as zero trust, joint warfighting cloud capability (JWCC), software modernization and electromagnetic spectrum operations (EMSO),” wrote DoD CIO John Sherman on LinkedIn. “I’d also like to thank Dave McKeown for the terrific work he has done filling in as the acting principal deputy for the last six months. Dave’s experience, leadership, and drive have been invaluable as we rolled out zero trust and awarded JWCC.”

Among her duties as principal deputy CIO, Beavers will advise the lead the engagement with the defense agencies and field activities CIOs and drive strategic resource planning across the IT and cybersecurity domains.

In addition to running the enterprise capabilities office, Beavers is the mobilization assistant to the vice commander of the Sixteenth Air Force (Air Forces Cyber), in Joint Base San Antonio-Lackland, Texas. She has been an Air Force reservist for more than 30 years.

Beavers also worked for NBC Universal and GE Healthcare in assorted executive positions.

As for Chappell, he brings 18 years of experience as a contractor including most recently working for EY as a senior manager for the past four-plus years. In that role, he was a global solutions architect working with the Army to establish its data quality plan, with the Defense Health Agency and the FBI.

Additionally, he worked for Accenture, Moog and GE.

Search began in 2022

Army PEO-EIS began its search for a new CIO in November.

“The new CIO will enable us to better support the Army’s evolving vision and priorities. One of our greatest strengths in the past has been our organization around two portfolios — the Business Mission Area and our Networks, Cyber and Services portfolio; this structure has allowed our PMs to perform their mission with additional support from the headquarters. But, to best support the Army’s Digital Transformation vision, we need to change the way we do business and integrate across the entire PEO. We need to bring together the cloud, data, network and cyber pieces from a technical and programmatic perspective to support the Army’s new strategic guidance, particularly the Army Data Plan, Cloud Plan and Unified Network Plan,” said PEO-EIS spokesperson in an email to Federal News Network in November. “To that end, we’re creating a Chief Information Office (CIO) by the end of this quarter, led by a new chief information officer. The CIO will be headquartered at Fort Belvoir but have a PEO-wide focus. It will consist of the chief information officer, technical integration lead and three sub-directorates, most of which already exist at our organization and simply will be consolidated under the CIO.”

The spokesperson said the decision to bring back the CIO role is based on two basic needs. First the focus on a data-centric environment and second the need to better technically integrate across all their networks and software portfolio to rapidly and effectively support digital transformation efforts.

Transformation is the key word for three other moves in the federal sector.

GSA announced Mukunda Penugonde is the new deputy director of the Technology Transformation Service. He comes to GSA from Hulu/Disney where he was the director of technical program management and has focused on strategic and business initiatives in high-growth digital product organizations.

“Mukunda has a strong background in leading and managing organizational change, including driving the introduction and adoption of new frameworks to increase collaboration across products and programs, and creating reliable and sustainable organizational structures for growth and scale,” said Ann Lewis, the director of TTS in an email statement.

This looks to be Penugonde’s stint in the federal sector. He spent his entire career working for the entertainment companies, including Sony Interactive Hulu and Disney.

Additionally, GSA is bringing is deputy CFO Mehul Parekh to the Federal Acquisition Service to serve as senior advisor for operations for TTS.

FAS Commissioner Sonny Hashmi said in an email to staff, which Federal News Network obtained, that Parekh “brings a wealth of experience as a financial executive, and has been recognized for his ability to lead diverse teams. His appointment will be crucial to bringing stability and support to the TTS organization.”

Parekh has been with GSA for five years and previously worked at the National Labor Relations Board and the Homeland Security Department.

Both join TTS at a critical time as it seeks to recover from the Login.gov debacle that has further bruised the organization’s credibility with other agencies.

GSA is bringing in a third new person to FAS to focus on human resources. Region 2 Commissioner Jeff Lau is joining FAS on detail to lead efforts in maintaining and growing our acquisition workforce.

“Our agency’s biggest contribution to the federal government is our world-class acquisition professionals. Jeff has substantial experience developing strategies in the area of human capital and employee engagement, and has been a proactive leader on DEIA issues, areas that will serve him well in this new role,” Hashmi said.

Tony Frater will serve as acting regional commissioner for our Northeast and Caribbean Region while Lau is on detail.

NIH, CISA people on the move

One other big change in the CIO ranks. Alastair Thomson, the CIO at the NIH National Heart, Lung and Blood Institute, is moving over to a 50% detail to be a senior advisor at the new Advanced Research Projects Agency-Health (ARPA-H).

“I’m excited to share that I’m starting a new 50% detail as senior advisor for data technology innovation at Advanced Research Projects Agency for Health (ARPA-H)!” Thomson wrote on LinkedIn.

Thomson has been with NHLBI for 13 years, including the last nine as its CIO. He began his federal career with NIH in 2002.

Finally, there is one departure of note in the federal community. Kiersten Todt, the chief of staff for the Cybersecurity and Infrastructure Security Agency, is leaving after 22 months to return to the private sector.

Kathryn Coulter Mitchell, currently the deputy undersecretary for the DHS Science and Technology Directorate (S&T), will become CISA’s new chief of staff. In that role, Coulter Mitchell will support the planning, allocation of resources and implementation of the agency’s strategic plan.

“I want to thank my dear friend and our fabulous outgoing chief of staff Kiersten Todt,” said CISA Director Jen Easterly in a statement. “Kiersten’s contributions to this administration cannot be overstated – helping to transform CISA into America’s cyber defense agency, while spearheading a number of CISA priorities including collaboration with industry, corporate cyber responsibility, the stand up of our Cybersecurity Advisory Committee and the co-creation of our People First culture. All of us at CISA are grateful to Kiersten for her tireless work over the past 22 months and look forward to her continued engagement with CISA as we execute our agency’s critical mission.”

Coulter Mitchell has been a chief of staff before, working from May 2021 to September 2022 for the senior official performing the duties of the undersecretary of S&T.

Prior to joining S&T, she worked in the private sector for CSRA, Booz Allen Hamilton and MITRE, and on Capitol Hill for former Rep. Tom Davis (R-Va.).

It’s been almost six years since Maryland Democrat Senator Barbara Mikulski left Congress, but her influence on preventing all public-private competitions in government has not waned.

Starting with the fiscal 2009 appropriations bill and through today, the firebrand 31-year Senate veteran’s disdain for competitions under Circular A-76 remains embedded in all agencies.

But don’t look now, there is a crack in the façade. House Oversight and Accountability Committee Republicans are starting to poke holes in the 14-year-old ban, first by asking simple questions about the Federal Activities Inventory Reform (FAIR) Act of 1998.

The FAIR Act requires agencies to publish inventories of all positions that the agency determined are not inherently governmental, and therefore, potentially, open for competition with the private sector.

“The on-time posting of clear and comprehensive FAIR Act inventories is a key element of open and transparent government. Use of the inventories in decisions about outsourcing is a needed component of sound federal financial stewardship. We would like to work with Office of Management and Budget (OMB) going forward to ensure full compliance with both the letter and the spirit of the FAIR Act,” wrote the three subcommittee chairmen, Reps. Nancy Mace (R-S.C.), Pete Sessions (R-Texas) and Lisa McClain (R-Mich.), in a April 4 letter to Shalanda Young, the Office of Management and Budget’s director.

The lawmakers called the current state of the FAIR Act inventories poor with many inventories posted online “in formats that are barely decipherable.”

And the committee’s conclusion isn’t exactly wrong.

A Federal News Network review of CFO Act agency FAIR Act inventories based on links provided by the Office of Federal Procurement Policy demonstrates a lack of attention to the FAIR Act.

CFO Act agency compliance with the Federal Activities Inventory Reform (FAIR) Act of 1998

House Oversight and Accountability Committee lawmakers wrote a letter on April 4 to the Office of Management and Budget seeking details on how agencies are complying with the FAIR Act.  Federal News Network reviewed the latest data using the Office of Federal Procurement Policy website and regular old internet searches to determine the status of agency compliance based on publicly available data.

The last time OMB issued any sort of notice around the FAIR Act was in 2019 when it sort of published the 2017 inventories. The links in OMB’s notice don’t go to any specific site, but the agency’s main web page so find the FAIR inventories is an exercise in search.

And OFPP, which has been without a Senate confirmed leader now since January 2021 and without a nominee since June, hasn’t issued any new policies or memos or really anything around A-76 or FAIR Act inventories since a 2011 update to the definition of inherently governmental.

An email to OMB seeking comment on the letter and A-76 was not returned.

Mikulski’s provision in the appropriations bill, which prohibits agencies from spending any money on A-76 competitions, has all but killed the idea of competing work with the private sector.

A legislative proposal that went nowhere

The Defense Department tried to resurrect A-76 by submitting a legislative proposal to Congress in 2018. The Pentagon’s goal was to give local commanders and human resources officials more authority to determine the right mix of uniformed members, civilian workers and contractors for the missions they oversee. DoD wanted those decisions to be made in a decentralized fashion, since each military command and Defense agency has different workforce requirements. It’s unclear what happened to that legislative proposal.

The last time known public-private competition came from a quasi-agency, the Tennessee Valley Authority in 2020, which reversed its plan to outsource technology workers to the private sector. TVA is not funded by Congress and receives its budget through the sale of electricity through the Tennessee valley, which includes parts of seven states — Tennessee, Alabama, Georgia, Kentucky, Mississippi, North Carolina and Virginia. So the prohibition in the appropriations law didn’t impact its ability to seek to outsource TVA employee jobs.

The lawmakers are asking OMB whether using the methodology under A-76 continues to make sense.

“At a time of surging annual deficits, the administration should be using all cost-saving tools at its disposal — including outsourcing functions that can be performed more efficiently by the private sector,” the letter stated.

Sources say this entire effort to revive the competitive sourcing is driven by Peter Warren, a former Trump administration appointee in the Office of Management and Budget. Warren, a senior advisor to Committee Chairman Rep. James Comer (R-Ky.), served for almost three years as associate director for federal management policy at OMB.

A-76 and public-private competitions, last in vogue during the administration of George W. Bush, are problematic, but it doesn’t mean fixing the approach and reviewing the inventories isn’t a good idea.

In fact, Mikulski and Rep. John Sarbanes (D-Md.) tried to do that in 2011 with the Correction of Longstanding Errors in Agencies Unsustainable Procurements (CLEAN UP) Act. The bill never advanced in either house of Congress.

The Congressional Research Service reported in June 2020 that A-76 dates back to 1966 with the last substantial revision in 2003.

CRS posted four questions focused on the Defense Department, but could really apply to any agency, about whether to repeal or retain or modify the long-time suspension of A-76:

• To what extent should existing law and policy guidance for public-private competitions be modified to reflect best practices and prior lessons learned?
• What benefits might be realized in requiring a phased rollback of the moratorium, or in allowing selected public-private competitions to proceed as pilots?
• Should certain government performed commercial-type functions beyond those already exempted by statute and policy be protected from public-private competitions? If so, which functions?
• Has DoD developed consistent methodologies and procedures for comparing public sector and private sector costs — as well as consistent methodologies for capturing and reporting cost savings or performance improvements from a public-private competition?
• Noting that it has been more than 10 years since DoD has carried out a public-private competition, does the current DoD workforce have sufficient knowledge of the public-private competition process to be able to fairly and effectively evaluate A-76 competitions?

Of course, any mention of A-76 and competing federal jobs gets the ire of the federal employees unions up. The American Federation of Government Employees (AFGE) was especially aggressive in trying to stop A-76 during the Bush administration. And it’s logical to expect AFGE and other federal unions to quickly shut any competitive sourcing door that the Biden administration even thinks about opening.

Union pushing for more feds

In fact, AFGE wrote a letter on March 27 to Defense Secretary Lloyd Austin about the Defense Industrial Base inadequacy in meeting the country’s defense needs. It said the organic facilities “can be mobilized on demand rather than having to coax, incentivize or nationalize the private sector.” AFGE said a preference for contracting has weakened the organic side of things. The union offered a list of legislative and regulatory changes to enhance use of the organic facilities, including pay raises for their wage-grade employees and converting term and temporary employees to permanent.

The question the lawmakers are asking is very much a political issue, but it isn’t necessarily a bad one.

With so much of the government outsourced to the private sector already and the federal workforce understaffed, overworked in so many areas, are there functions that could be moved to the private sector with the end result not being fewer, but better, more highly paid federal jobs?

The Trump administration pushed the idea of moving federal employees from low-value, manual work to high-value, analytical work. What if A-76 didn’t just focus on competing jobs with the private sector, but what are the jobs feds shouldn’t be doing any more, and whether technology, such as robotics process automation, or the private sector could take on those roles?

After 14 years of A-76 being dormant, don’t expect the Democrat-led Congress or White House to all of a sudden be fans of public-private competitions, but maybe it’s time to rethink what some sort of hybrid or modified approach really could do to improve federal services and not impact the workforce.

CLARIFICATION: Sonny Hashmi, the Federal Acquisition Service Commissioner, did not take part in the March 20 meeting with the TMF Board as previously reported. GSA also says it alerted the TMF Board in February 2022 and has been regularly briefing them on its progress. The story has been updated to reflect these changes.

The General Services Administration is facing a crisis of confidence.

The third scathing inspector general report since 2016 once again reinforced how headquarters can’t make the Technology Transformation Service play by the government’s rules, in turn leading agency chief information officers and other technology executives to question whether GSA, as a whole, can be trusted.

Interviews with five current federal technology executives, three former technology leaders and industry experts say the trust between TTS, and in some ways GSA, has, unfortunately, once again been broken.

“TTS sells you snake oil and then leaves,” said one agency CIO, who like others for this story, requested anonymity in order to speak candidly about their work with GSA and TTS. “My team must clean up TTS’ mess, and programs are more upset because they didn’t get what they thought they were promised.”

Other technology executives echoed these comments, saying they either don’t trust TTS to come into their agency, or if they do, only in certain circumstances when they can wrap oversight and accountability from their own staff around them.

“If you talk to any CIO, they will tell you they will not welcome having TTS interject themselves into their enterprise. It’s an attitude. It’s like ‘we are here; we are the cool kids and you have screwed things up for years, so now we will fix it.’  But they don’t understand the long-term challenges and needs of the agency,” said another CIO.

Another federal technology executive added, “They come in to solve one problem, and they create two different problems. They are not systems experts. The culture of the organization doesn’t focus on fixing the business processes and the technology. They are very much go in and take a quick hit.”

Failed attempt to change TTS

While many technology executives said they weren’t surprised by the IG’s findings that TTS misled agencies for four years about how Login.gov met certain identity proofing requirements under the National Institute of Standards and Technology Special Publication 800-63-3, the IG report signals TTS remains a horse that cannot be broken, despite multiple attempts across multiple administrations.

“TTS was encouraged to be risk-takers and innovative, but they never realized that they are still federal employees, and there are rules and there is a bureaucracy, which isn’t always bad. It’s a way to make sure you are coloring in the lines,” said a former federal executive familiar with GSA. “I think most people like the idea of TTS, bringing in innovative acquisition approaches and encouraging folks to come in and out of government. But maybe there needs to be an education course for all new employees about the rules of the road in government. Or maybe they need to be a hybrid organization that lets people that come in and out, but also has permanent staff to make sure rules are being followed.”

In fact, sources say during the final days of the Trump administration, GSA leadership seriously considered moving the TTS director, a deputy commissioner of the Federal Acquisition Service, down a notch to an assistant commissioner role, in part because of the organization’s refusal to follow federal acquisition and management principles.

“GSA did think about how to restructure TTS management. It’s unusual to have two deputy commissioners, and organizationally, it would be better to have TTS at [the] same level as other assistant commissioners in FAS,” said one former federal official, familiar with GSA’s considerations. “GSA was in touch with transition officials and floated that management change, and the Biden transition declined to agree with us. It was a way of setting expectations that they are part of the team and were held to the same expectations and all rules around financial, legal and acquisition.”

The concern about TTS from the beginning was, in making the leader a deputy commissioner, it gave them a higher profile with internal and external folks, especially given the size and impact of the organization, which pales in comparison to several of GSA’s other business lines, like technology and professional services.

Reminiscent of ‘parking’ money scandal

This latest incident brings back bad memories of GSA’s troubles in the 2000s. And as the old adage says, “those who don’t learn from history are doomed to repeat it.”

It now seems like GSA’s crisis of confidence across many agencies has returned it to the days of its “parking” money scandal in the early 2000s. During that episode, GSA offered the Defense Department and other agencies the ability to improperly extend expiring funds by “parking” the money in assistant acquisition accounts.

Former federal executives said it took GSA several years to rebuild the trust from that incident, and after four years of deceit around the Login.gov platform that not only involves TTS, but the agency’s well-respected CIO, Dave Shive, it’s going to take more than a few promises and well-worn talking points to rebuild the trust.

“GSA got very serious about repairing that trust in the 2000s. Assisted Acquisition Services was a huge business line for them. It went from $7 billion down to $3 billion a year. Now it’s up to more than $15 billion. But it grew in way that is more structured, there is more training and more control around it,” said a former federal executive familiar with GSA and TTS. “It will take a lot of repairs to fix trust issues at TTS and to get TTS to work for agencies again. If GSA is serious about keeping this organization and getting people to understand their value and reestablish some trust, this will take some effort. It is not just briefing people and replacing people, but a long-term effort.”

For GSA, those long-term efforts started on March 20, by meeting with the Technology Modernization Fund Board, and continues Wednesday during a hearing before the House Oversight and Accountability Committee’s Subcommittee on Government Operations and the Federal Workforce.

TMF Board unhappy

Government sources say GSA started its apology tour when Sonny Hashmi, the commissioner of the Federal Acquisition Service, where TTS resides, and TTS Director Ann Lewis appeared before the TMF Board, which awarded Login.gov $187 million in September 2021, by far the largest amount in the five years since Congress established the IT modernization “loan” program.

Sources say GSA officials explained to the board where Login.gov is today and ensured the board knew about the leadership changes for both TTS and Login.

“There was clearly concern from high levels of government at the meeting,” one government official said. “But there were no specifics or decisions about whether to stop funding Login. I think there was recognition that it’s a new crew running Login, and they are committed to fixing the problems. It’s clear they are certainly willing to build trust back up.”

There is another TMF Board meeting scheduled in the coming weeks where Login.gov may come up again.

GSA says  it informed the TMF Board in February 2022 of the previous mischaracterizations of Login.gov.

“Since receiving initial funds from the TMF, Login.gov has briefed the board on at least a quarterly basis, providing detailed updates and sharing regular progress on how funds are being used to achieve agreed-upon milestones – related to preventing fraud, launching in-person proofing, providing better customer service, etc. – in improving Login.gov,” a GSA official said.

Sources also say the CIO and Chief Information Security Officer (CISO) councils are scheduled to meet as well in April, and Login’s problems are expected to be on the agenda.

“Trust in TTS, in Login and in GSA has been frayed. What else about their services — whether building security or procurement that we use — have they been less than transparent about?” said another federal technology official. “I think a lot of us will demand more evidence and transparency about how they are doing business.”

Clare Martorana, the federal CIO and chairwoman of the TMF Board, said rebuilding the trust in TTS and Login will be important. But she said she has full confidence in the platform.

“It is recoverable. Our expectations are that every single project and program that we run operates with integrity and accountability and transparency. I think that the GSA leadership team has really proven that, but it is a ding, and it does cause pause,” Martorana said in an interview with Federal News Network. “We as a board are fully interrogating the process that we went through for the investment, making sure that we are going back and looking at the milestones that we were managing to in all of our delivery, to make sure that we’re doing our job, because we are the stewards of the taxpayer dollar, as well as the agencies that get TMF funding. We take this all very seriously, and are having really rigorous conversations, both amongst the board itself, with our TMF program management office colleagues, and with our Login colleagues, because this is something that we’re going to have to build back from as a shared service provider. I have all the confidence in the world that we will be able to recover from this and that our investment has been meaningful for the American people.”

The board has allocated $44 million of the $187 million to Login.gov, according to the TMF website.

Hashmi said in an email to Federal News Network that GSA has used the funding to launch an in-person proofing pilot to support identity verification for some users at 18,000 Postal Service locations.

“Earning and maintaining the trust of our customers, stakeholders, and the public is our highest priority, and that commitment is embedded throughout our Technology Transformation Services programs and initiatives,” Hashmi said. “That is reflected in our management response to the IG report on Login.gov, which outlines how, over the last year, we have taken significant actions to strengthen oversight and implement additional management controls to ensure accountability at Login.gov and throughout TTS. Moving forward, I am committed to fully implementing all of the IG’s recommendations and taking further steps to enable TTS to more effectively deliver accessible, secure and privacy-protecting solutions to our customers and the American public.”

Tepid support for TMF investment

Sources say the TMF Board was hesitant to fund Login.gov from its initial proposal.

Multiple sources say the board felt pressure to approve the investment, despite obvious shortcomings in its proposal.

“The level of detail we saw in every other TMF proposal wasn’t there, and the confidence in the TTS team and GSA was a factor in the doubts raised by the board,” said one source. “Even if one person formally shot it down, there were others on the fence or had hesitation that they didn’t have the right team in place to be successful. There was concern that they couldn’t execute on their plan.”

Another source said there was some who wanted to split the award to Login into smaller amounts, with milestones along the way to earn more funding.

“It was just too big of an award,” the second source said. “But there was an immense surge of money coming in, new people on the TMF Board and this was one of 50-70 proposals that the board looked at over a couple of months. There was a lot of interest to get Login funding.”

The first source said there definitely was fear of a “backlash” if the board voted down the project.

“The board approved it, and like every other project, TTS should have come in every quarter for a deep dive on its progress to show progress,” said the first source. “Every investment has to provide updates, but TTS had a shorter timeline on it and more guardrails for oversight. It’s unclear if the board ended up keeping TTS on a short leash.”

While the TMF Board hasn’t decided how it will turn up the scrutiny on Login.gov, sources say they should demand more transparency and demonstrate what the funding is going toward.

“If I were on the board, I would want appropriate levels of detail and not a sales pitch. The board is responsible for investment oversight and to ensure the project is spending its money wisely, addressing risks, and meeting its milestones,” said the first source.

House lawmakers to grill GSA

Hashmi will get to explain in much more detail in stop two of the apology tour. He will be among one of three featured witnesses at the House subcommittee hearing on Wednesday.

Hashmi is scheduled to be joined by GSA Inspector General Carol Ochoa and Jim St. Pierre, the acting director of NIST’s Information Technology Laboratory.

The subcommittee will focus on determining why GSA leaders did not exercise adequate oversight of TTS and the services it provides, and examine whether Login.gov should remain a central component of the Biden administration’s anti-fraud efforts until it complied with all required standards.

“GSA exists so that agencies can focus on their mission-critical [responsibilities] and not have to worry about services like Login.gov falling short of their promised goal. This wasn’t just a mistake on their part, it was a longstanding misrepresentation, so this hits on the trust front in multiple ways,” said a spokesperson for the committee in an email to Federal News Network.

The Senate Homeland Security and Governmental Affairs Committee also is paying attention to Login’s problems.

An aide for Sen. Gary Peters (D-Mich.), chairman of the committee, said Peters recently spoke with GSA Administrator Robin Carnahan about what the agency is doing to resolve the issues with Login.gov.

“Chairman Peters will continue conducting oversight and work to identify potential reforms to improve accountability and transparency of Login.gov, as well as build trust in this important program,” the aide said.

New RFI for next generation services

Another step to rebuild that trust is coming through the acquisition process.

TTS just released a new request for information for Login.gov’s next-generation identity proofing solutions. The goal of the RFI is to get feedback from industry and other experts for how Login can provide secure, simple and equitable identity proofing services. This includes more than 100 mandatory requirements across nine functional categories.

GSA plans to create a multiple award blanket purchase agreement that runs on top of the schedules contract.

Responses to the RFI are due April 7.

The concept of Login hasn’t been popular among vendors since it began in 2017, with many seeing it as direct and, to some, unfair competition with the private sector.

Blake Hall, the CEO of ID.me, one of the most vocal critics of Login.gov, said competition and choice is an important aspect of the identity and access management effort across government.

“ID.me has long been committed to a future where consumers, not data brokers or government agencies, have control of their own data online. We are confident our pass rates and equity metrics significantly exceed rates provided by data brokers operating at a similar level of security. Government agencies need transparency around performance metrics to evaluate solutions through the lens of security and accessibility,” Hall wrote in an email to Federal News Network. “At the same time, all cloud service providers should be independently audited and certified against NIST assurance levels. This is already the case for private sector developed solutions. Public-sector solutions should adhere to oversight as well to ensure a level playing field.”

ID.me isn’t without its own challenges. The IRS pulled back on its use of the commercial service after evidence emerged that ID.me’s facial recognition identity proofing service wasn’t at a high enough quality.

This shows the challenges faced by Login.gov in doing advanced identity proofing aren’t confined to the government. But it’s also why the false assertions left so many frustrated, because it was a well-known problem across government and industry that the NIST standards were difficult to meet.

This is why, as another industry executive, who requested anonymity, said, it doesn’t make sense for GSA to keep pushing Login.gov as a government-off-the-shelf platform.

The executive said GSA’s underlying technology can’t be as agile as industry, no matter how much money they get from TMF or Congress.

“Login just can’t evolve fast enough and scale quickly enough to handle the needs of the agencies,” the executive said. “Industry is incentivized to do the right thing because there are replacements out there if a customer doesn’t like the services we are providing. But if Login doesn’t do right thing, what’s the incentive to change or fix?”

Support for Login.gov concept remains strong

The executive added the consistent feedback they received from government about Login has been that it’s too expensive and the customer service is lacking.

Federal executives agree that the price and services from Login has been a tough pill to swallow for some time. However, almost every executive talked to for this article agreed that there is a need for a Login.gov-type of platform. One that provides basic identity account management through username, passwords and multi-factor authentication.

“Login has gotten a lot better over the years. What they are doing now is quite good. It’s nice to have a single point from customer experience perspective too,” said another federal technology executive. “I think it should stop short of going beyond what it is today, however. It shouldn’t go into identity proofing space. It should strike a balance with private sector, possibly using them for Level 2 and Level 3 proofing, as industry will solve the identity problem faster than the government will. GSA already solved the account problem.”

Several other CIOs and federal technology executives said they were happy with the service they were getting at the basic levels from Login.

“I’m a strong supporter of a single governmentwide identity management solution instead of having every agency making citizens go through multiple vendors or systems,” said one agency CIO. “We have been happy with Login and are happy to outsource these type of services rather than build our own.”

Another CIO offered similar comments, but said they knew Login oversold their capabilities, especially around identity proofing.

Though some reports have said the White House is considering through an executive order on managing digital identities, federal executives cautioned against mandating the use of Login .

“Managing the identity piece makes more sense for agencies to own and implement. That way they can do threat hunting and other security pieces over top of it, and we are better set up for those efforts,” said a federal technology executive. “But where you have federal agencies who do not have the necessary technical capabilities to manage identities, maybe give them the option in future to use an offering from GSA and Login, but they need to stop short of a mandate.”

How GSA can rebuild the customers’ trust?

Mandate or not from the White House, it’s clear that federal executives will not turn away from Login anytime soon. But GSA’s bigger challenge is can they reel in TTS and fix its reputation? Or is the third IG report in six years the final nail in the organization’s reputational coffin?

Several former and current federal executives said if GSA is serious about changing TTS, it has to start at the top, with Carnahan taking the lead. The concern, of course, is she comes from that culture, having run 18F’s state and local group previously.

The executives give high marks to Hashmi and expressed sympathy for him inheriting the mess.

“What got me was systematic breakdown across GSA among several offices — FAS, CIO, TTS. That to me led the question of who is actually managing GSA these days, and if they knew what this program office, which was never revenue-neutral, was doing and what are they hoping to accomplish?” said one federal technology executive. “GSA or others have to ask why is [the] TTS head a political appointee? I’m not sure anyone knows why that is the case. If you are trying to run this as a governmentwide service, do you really want politicals in the middle of this? Or would it better to be seen as a good government program and insulated from political pressures?”

Another federal executive said the Office of Management and Budget should consider pulling Login out of TTS and GSA altogether. Maybe even make it part of OMB or its own standalone program.

“That is not the model usually done, but the amount of trust agencies will hand off to Login, you don’t want 14 levels of leadership between you and accountability of the program like it is now,” the executive said. “You are talking about a tool leveraged by the vast majority of American people, so I think the administration needs to create such scrutiny and accountability around it that they will ensure they deliver on their promise.”

A promise that is well supported, but a trust that has been broken.

The Commerce Department’s Commerce Acquisition for Transformational Technology Services (CATTS) multiple award contract is the perfect microcosm of all that’s wrong with federal procurement and small business.

Despite the fact there are thousands of contracts that agencies award every day going off without a hitch — at least that’s the important reminder from former federal executive David Drabkin and many others over the years — the Commerce effort to create a high-dollar, long-term relationship with small businesses flies in the face of the government’s long-held goal to increase and support the small business industrial base.

In fact, it’s easy to argue that CATTS, and really many other similar acquisitions efforts, are detrimental to that goal.

“Where you have a large number of contractors differentiating among them is a challenge. With CATTS, price was not a primary factor as the range from bidders was incredible. The proposed prices were evaluated but not scored, which is a new trend to move away from pricing at prime level until you get work done,” said Alan Chvotkin, a procurement expert and partner with Nicolus Liu. “When you get hundreds or thousands of bidders on a contract like this, I’m a big fan of letting them all in. I’ve told the General Services Administration all the time that their biggest enemy to getting a contract like this done is GSA itself. Agencies go crazy to evaluate and pick an arbitrary score. While I’m not sure if that is the case here, I’m also not sure if 15 winners is enough or too many or if they could let everyone in too. But that is part of the acquisition strategy that agencies spend a lot of time on, but don’t look at their market assessments well enough and that leads them into this type of challenge.”

On the surface, Commerce’s challenge is it’s facing 12 protests before the Court of Federal Claims of its award under CATTS.

The agency received dozens of bids for its 10-year IT services contract with a ceiling of $1.5 billion. The contract is for agencywide IT services support including chief information officer support, digital document and records management, managed service outsourcing and consulting, IT operations and maintenance, IT services management and cybersecurity.

The vendors who are protesting claim Commerce misevaluated proposals because the agency didn’t adhere to the criteria it listed in the solicitation.

Herschel Chandler, the president of Information Unlimited Inc. (IUI), a small business who previously did work with the agency through other vehicles, said this is a first-of-a-kind Commercewide acquisition vehicle. He, like many other companies, believe they had no choice but to protest because if they don’t get on CATTS, they will be shutout of Commerce for the long term.

Winner take all contracts

That all-or-nothing feeling that Chandler and other small businesses protesting CATTS have is common across the government and part of the bigger issue at hand.

From the National Institutes of Health IT Acquisition and Assessment Center’s (NITAAC) CIO-SP4 to the Homeland Security Department’s FirstSource III to GSA’s defunct Alliant 2 small business, agencies faced and will continue to face protests and delays while creating frustrations among potential agency customers and vendors for the arbitrary decision to limit the number of awardees under these mega contracts.

The situation has only gotten worse over the past decade with the Office of Federal Procurement Policy’s push for category management, use of the meaningless term “best-in-class” contract and the emphasis for agencies to focus their spending on these types of vehicles.

It’s not that big contracts weren’t protested before category management and “best-in-class” came into the lexicon, but vendors feel more pressure than ever to win a spot.

The data supports this feeling among small businesses, both in terms of how much agencies are spending on these large contracts and the downstream impact of not winning.

GSA says agencies spent $54.5 billion on BICs in fiscal 2022, missing the governmentwide goal of 12% by half a percent. That was still $7 billion more than in 2021 and almost $10 billion more than in 2020. Of the 28 largest agencies GSA tracks for BIC spending, only eight didn’t meet their 2022 goal. Commerce, for example, spent 17.7% of its acquisition budget on BIC contracts, 1.7% more than its goal.

Shrinking small business base

At the same time, the data also shows the focus on BIC and category management more broadly is hurting the industrial base. A report from the Women’s Chamber of Commerce found in 2021 that the federal acquisition process category management has led to a drop in the number of small business vendors participating in government contracting. Since 2017, small businesses showed a 24% fall. Women-owned suppliers dropped more than 22%, while veteran-owned suppliers dipped more than 17%.

The Small Business Administration told Congress last June that the combination of category management and contract bundling also were negatively impacting the small business industrial base.

While it’s doubtful that the Commerce Department CATTS procurement will end up being a BIC, which is reserved mainly for governmentwide acquisition contracts or multiple award contracts open to multiple agencies, like FirstSource III and CIO-SP4, the fact is the pressure to bid and win these large, long-term contracts is real.

And this gets us back to why it’s so mindboggling that Commerce is digging in its heels on CATTS.

Based on the data provided by an agency spokesperson, Commerce’s history with supporting small firms has been strong and it expected to award more contract dollars through CATTS to small firms.

The spokesperson said the department awarded approximately 50% of total eligible obligations to small business against a prime-contracting goal of 39% and exceeded all prime-contracting socio-economic goals.

“For the portfolio of IT programs encompassed within the CATTS scope of work over the previous five years approximately 58% of the associated IT spend was awarded to small business and 42% to other-than-small business,” the spokesperson said. “Through use of the CATTS contract, Commerce projects up to 98% of the IT spend on this portfolio will be awarded to small business.”

The spokesperson added that in 2022, Commerce awarded contracts to approximately 4,888 different companies including 3,434 small businesses and 1,454 other than small businesses, with small businesses representing approximately 70% of Commerce’s overall supplier base.

It seems like CATTS is aimed at addressing major challenge all agencies face: a decreasing small business supplier base.

“These counts reflect a decrease of approximately 4% to 6% year-over-year compared to 2021 and 2020 consistent with a federalwide decrease in vendor counts,” the spokesperson said. “In this regard, overall both the number of small business and other-than-small business suppliers decreased for Commerce by approximately 8% since 2020. Commerce is actively pursuing means of expanding its supplier base, however, through proactive market research and innovative acquisition strategies consistent with recently issued OMB memorandum M-23-11, Creating a More Diverse and Resilient Federal Marketplace through Increased Participation of New and Recent Entrants. As reflected in GSA’s supplier base dashboard, Commerce’s efforts in 2022 to grow its supplier base resulted in a new entrant rate of 22% compared with the governmentwide average of 14.5%. Commerce is a leader in promoting small business contracting and increasing the pool of federal suppliers and anticipates making further contributions in these areas in 2023 and beyond.”

A messy solicitation from the start

So despite the need to expand its small business industrial base and the Biden administration’s emphasis on supporting small firms, Commerce is making it harder for the unsuccessful bidders of CATTS to continue to work in the federal market.

“We didn’t want to protest, but we are in a situation that we’ve never been in before,” said one industry executive, who requested anonymity because they feared retribution from Commerce. “If we don’t get on CATTS, we think we will be shut out from Commerce.”

The industry executive, like several others who chose to speak anonymously, expressed disbelief, frustration and bewilderment about how poorly Commerce ran the procurement and how their actions fly in the face of the Biden administration’s small business focus.

From the beginning, vendors bidding on the procurement said it went awry. The year-plus long solicitation process included 13 amendments, 2,198 questions submitted by vendors and extension after extension of the due dates.

Not surprisingly, Commerce’s spokesperson declined to comment on the CATTS protests because it’s under active litigation.

One industry executive called it one of the most expensive bids their company ever put together. The executive said they spent almost $100,000, which is three to four times more than any other typical bid.

Another executive called the RFP the worst they have seen in 20 years of working on federal contracts. The executive said they kept waiting for Commerce to fix the problems, and therefore withheld a pre-award protest.

“This whole procurement from day one has been very hodgepodge. It came out as a draft and we all figured they would clean it up during final solicitation process and they didn’t,” the executive said. “Then they had phase 1 and 2 deadlines, and if you read the RFP, there were so many redundancies and overlapping requirements all over the place. It looked as if 10 different people wrote it and they decided to put everyone’s ideas into the RFP, and it became confusing and contradictory.”

Then came the award decision with Commerce choosing 15 companies in September.

The unsuccessful bidders said the debriefing put a sour cherry on top of the entire poorly run process.

A flawed procurement?

Chandler said Commerce doubled down on its inconsistency and flawed procurement strategy.

“When developing the proposal, you are looking at section M, the evaluation criteria. That is how they must evaluate the proposals. It’s in black and white. But after we got the debrief, we were disqualified because of some of the wording of the evaluation criteria,” he said. “In Phase 1, Commerce said demonstrate your ability to meet the criteria across four subsections, with each being weighted the same. We hung our hat on those criteria. But during the debriefing the government said we failed to provide an approach in our technical evaluation. They never asked for an approach, but that is where they dinged us. And it was common across all protests.”

Of the 87 bids Commerce received, Chandler said 75% earned an unsatisfactory rating for their technical proposal.

He said right then and there Commerce should’ve realized how flawed the procurement was and taken corrective action.

Other executives offered similar debriefing stories where Commerce said the reason why they failed the technical evaluation was a lack of an explicit approach, even though the RFP never asked for that in the evaluation criteria.

“If they had wanted us to demonstrate our ability and provide an approach, then we could’ve said how could we do that in 65-page limit for our proposal?” Chandler said. “But they didn’t say it and we didn’t ask.”

Chandler and others also pointed out that the price differential was substantial enough to raise red flags. Vendors’ bids ranged anywhere from $93 million to $54 million.

The protests ended up at the Court of Federal Claims instead of the Government Accountability Office, which typically takes longer to decide cases and costs the protestors a significant amount of money to pursue.

Costs to protest rising

But instead of Commerce seeing the concerns outlined by a dozen protestors, knowing the costs that potentially could be incurred by the small firms and taking corrective action, even to just reevaluate the bids, the vendors say Commerce is fighting tooth and nail.

Chandler said the protest is costing him north of $125,000.

Another vendor said they have spent more than $25,000 and could cost them upwards of $80,000 before deciding with withdraw.

A third vendor said the cost of lawyers is bleeding them.

“Commerce is just papering the attorneys. The administrative record is 30,000 pages. The government’s response was 300 pages itself,” Chandler said.

On top of that, many of the winning bidders decided to intervene, adding more to the costs for both the winners of CATTS and the protestors as the administrative record continued to grow.

Chvotkin, the procurement attorney, said it’s not unusual for winning companies to intervene.

“If this is under a protective order, vendors will pay a lot of money for attorneys to review this stuff, and then they can’t talk to clients about it because it is not brought in under administrative order. You have to retain counsel that you trust because they will know things they can’t tell you,” Chvotkin said. “Costs go up because it’s significantly more expensive to be the Court of Federal Claims instead of [the Government Accountability Office]. GAO was theoretically designed to be a lower cost protest option, which is why it’s shorter and the administrative record is less.”

So while the Court of Federal Claims decides these protests, the question comes back to how can agencies avoid this situation in the future?

One logical option would be for agencies to let all minimally qualified contractors on the vehicle and let them compete at the task order level, and not pick an arbitrary number of awardees.

Another idea, which is something GSA is starting to do, is to have multiple award phases like with Polaris, giving companies the opportunity to continually improve their bids, or have continuous on-ramps like they plan to do with OASIS+ as a way to get out of this protest and delay continuum.

To Commerce’s credit, it did plan for on-ramping of new entrants under CATTS.

“[T]hrough the CATTS on-ramping process, Commerce anticipates enabling the addition of new suppliers to replenish the vendor pool over the life of the contract. On-ramping is an acquisition innovation Commerce incorporated into the CATTS acquisition to ensure new suppliers can be added to the vendor pool to maintain robust competition and a diverse and resilient IT supplier base,” the agency spokesperson said.

At the same time, Commerce, unlike GSA, offered no timeline for when it would open up the on-ramp. GSA’s OASIS+, for example, plans to have a continuous on-ramp, which is a better strategy to avoid long term delays because of protests.

Options for the future

And of course, this entire situation begs the question: Why did Commerce believe it needed its own IT services contract in the first place? GSA and NITAAC already offer similar contract vehicles — Polaris, 8(a) STARS III, Vets GWAC and CIO-SP3 small business — not to mention the GSA schedules with 35,000 vendors, 70% or more of which are small firms.

As far as Commerce’s CATTS, the protestors say they hope the agency will either reevaluate bids or cancel the entire procurement and start over.

The other option, of course, is to let all the protestors on the contract because the difference between 15 awards and 27 awards is minimal when it comes to administrative costs and likelihood of receiving too many bids per task order also is small.

Of course, Commerce, like many agencies, probably would tell you they are limiting the number of awards because they only want the “cream of the crop” providers and don’t want to have to manage dozens of awardees.

But it’s clear that’s an old way of thinking. Data shows that if agencies let in 100 or 500 vendors, they will not get 50 or 250 bids per task order. Agencies typically get three to five, maybe 10 at most per task order.

If Commerce’s goal, and all agencies’ for that matter, is to support and grow the small business industrial base, then arbitrary decisions about the number of awards has got to end, or agencies need to find another way to constantly refresh the list of awardees to stay out of the arduous protest cycle.

It’s clear Commerce’s issues with CATTS is not a one-off. Every agency that decides to arbitrarily limit the number of awards under a massive winner-take-all type of contract will face these same challenges. This is why the answer doesn’t lie in Commerce or DHS or even GSA, but at the feet of the Office of Federal Procurement Policy to match policy with practice with training.

Until that happens, the talk about small businesses being the engine that runs the economy will remain just that.

“Data is a strategic asset. Transforming the Department of Defense (DoD) to a datacentric organization is critical to improving performance and creating decision advantage at all echelons from the battlespace to the board room, ensuring U.S. competitive advantage. To accelerate the department’s efforts, leaders must ensure all DoD data is visible, accessible, understandable, linked, trustworthy, interoperable and secure.”

So begins Deputy Secretary of Defense Kathleen Hicks’ May 2021 memo to create a data advantage across the Pentagon.

Despite this simple, but complex concept that every part of the military is focused on, the Department of the Navy’s commitment to moving toward this approach now is in question.

The DoN decided to eliminate its chief data officer’s billet in the senior executive service (SES), pushing out Tom Sasala, the department’s highly-respected CDO since October 2019, in what many call a punitive way, using the excuse it was eliminating the CDO position to meet a new congressional cap on DoD SES positions.

The move leaves the future of the service’s success in making data a strategic asset without a defined leader and potentially an overwhelmed data organization.

Government sources with knowledge of the Navy’s thinking say the decision to transfer Sasala out of the CDO role is both irrational and short-sighted.

“There is no CDO position. The billet has been abolished and the position doesn’t exist,” said one source, who requested anonymity in order to talk about personnel decisions. “They technically can’t put someone into it. They can assign statutory responsibilities to someone else, but there is no CDO billet. That means the work in the data office will have to be redistributed because there aren’t enough people to go to meetings and do the basic work.”

The Navy’s CDO ran weekly strategy meetings, worked on the data governance board that focused on initiatives like the Joint All-Domain Command and Control (JADC2) and Project Overmatch, and oversaw a host of other initiatives around creating trustworthy data in the Jupiter platform, that now will be distributed among the four remaining people in the office with the support of six contractors.

“What will end up happening is there will be a lot of pissed off customers and disgruntled employees, and then they will leave and a lot of what the Navy started will stop,” the source said. “When Tom left, there was no plan to backfill or address his day-to-day roles and responsibilities.”

Acting CDO or not?

The lack of a plan played out when Federal News Network asked 10 questions about the Navy’s decision to eliminate the CDO as an SES billet and reassign Sasala. The Navy chose to answer only three of the 10 questions while also quoting DoD and Office of Personnel Management SES reassignment regulations.

First, Navy spokesperson Lt. Alyson Hands said there is no specific CDO, but Duncan McCaskill, the DoN’s chief data analytics officer, would be filling the role and responsibility of the CDO, but was not the acting CDO. A few days later, Hands backtracked that comment, saying McCaskill is indeed the acting CDO.

McCaskill is not an SES. He is a highly qualified expert (HQE), a unique flexibility only DoD has to bring in individuals who possess uncommon special knowledge, skills and experience in an occupational field.

The Navy also has no plans to advertise to fill the SES CDO role.

“The use of data remains as important as ever in helping the Navy achieve its goals. All of the Navy’s programs are designed to be sustainable throughout leadership and personnel transitions,” Hands said in a statement to Federal News Network.

At the same time the DoN eliminated the CDO role as an SES billet, it brought in Jane Rathbun in a SES role as the new principal deputy CIO, a role that the service hasn’t filled since Kelly Fletcher left in 2018. Fletcher is now the State Department’s CIO.

Hands wouldn’t confirm if there is a SES billet for Rathbun, but did say her position is an authorized SES role.

The issue at hand is not about Rathbun or her role; that’s more of an aside to the bigger two issues.

Move to data-centricity hampered

The first is the decision to eliminate the CDO role as a SES job at a time when there may be few things that matter more than managing data to drive decisions. The Navy used the excuse that it had to reduce the number of SESers, but found room enough for Rathbun.

And second, the treatment of Sasala, who, for all intent and purposes, was “turkey farmed” to San Diego — giving him the choice to uproot his life and move across country to a job he wasn’t interested in or leave the Navy altogether. The DoN’s decision to do a management directed reassignment of Sasala came despite having as many as 34 open SES billets, including six to eight the service advertised for in December in the National Capital Region, having met the Congressionally-mandated caps earlier in 2022.

In January, Sasala moved back to the Army to be the deputy director in the Office of Business Transformation. He spent six years with the Army before taking on other roles, including the Navy’s CDO, since October 2019.

The DoN’s decision to eliminate the SES billet for the CDO is most disturbing for many former Navy and DoD officials.

Terry Halvorsen, the former DoD and Navy CIO and now vice president for federal client development at IBM, said while he’s not familiar with the Navy’s decision, he would find it surprising to cut the CDO at this time.

“I think right now cutting a data officer position in any big agency is going to make your data efforts harder to get done and it’s going to lose focus on some of those efforts. It would not be something I would want to do right now,” Halvorsen said. “If we believe data is king and the most valuable resource for any agency, then to cut that position would be a little unusual.”

Paul Puckett, the former director of the Army’s enterprise data cloud management agency and now chief technology officer of Clarity Innovations, said there has been discussions and debates across all agencies about where a CDO should sit and how it should align with the CIO.

But Puckett said no matter the approach, if the Navy has a different approach, they should articulate it in a way others could learn from.

Halvorsen added based on his experience as Navy CIO, a designated data officer could be helpful.

“Given the emphasis on data and given the other things that the CIO is looking to do, I would think right now having a data officer would be a key step forward in the success,” he said. “How you move the CDO role and how you get more value or how you structure it, all of those things will be harder to do without someone having a clear focus on data. That is regardless of any which service or anyone who is looking to cut the CDO role. They would be at a disadvantage to getting key programs that are data-centric on schedule.”

Did not stop the CDO change from happening

The Navy declined to answer more specific questions about what it means to its data-centric priorities by not having a permanent SES level CDO.

What’s unclear is why Navy CIO Aaron Weiss, who announced Feb. 21 he was leaving on March 17, would support such a decision given the progress the DoN has made in modernizing systems and technology during his tenure. The modern infrastructure means sharing and using data is much easier today than ever before.

The government source said Weiss may not have been given a choice by assistant secretary of the Navy for manpower and reserve affairs Franklin Parker.

The source said Weiss also didn’t act to stop the CDO decision from happening either.

“Aaron and Tom didn’t agree on number of topics, including the CDO not being directly in the CIO’s organization. Aaron believes the CDO should be a part of the CIO’s organization as it is in the private sector,” the source said.

And this leads to why some believe the decision to move Sasala was vindictive.

Sources say the Navy told Sasala the reason it was eliminating the CDO billet was to meet the Congressional mandate from the 2018 Defense authorization bill requiring DoD to eliminate 25% of its SES positions across the board by 2022.

But sources also say the case that the Navy’s actions against Sasala were punitive only grows when you consider the DoN cut off his access to the Pentagon, requiring Sasala to be escorted around the building, as well as his access to his email and shared drives.

“For his directed reassignment, Naval Information Warfare Systems Command (NAVWAR) didn’t know he was arriving until three hours before he was supposed to go,” said the source. “The new position was working as the assistant chief engineer, who was responsible for system engineering for nuclear command and control programs.”

Navy spokesperson Hands said the service could not comment on personnel decisions, but that it does follow OPM and DoD regulations.

“While in the role, SES members often move within the federal system, to both gain experience and leverage their expertise toward new challenges,” Hands said. “Assignments are discussed extensively with the individual and the leadership of their losing and gaining commands. If an individual is assigned outside their commuting area, they are given at least 60 days’ notice.”

Congressional mandate drove changes

Puckett, the former director of the Army’s cloud office, said his experience with Sasala was only positive.

“Tom is a smart person and for me he was wicked easy to work with. There is no doubt he can be polarizing, but I can be too. That’s not a measure of working with someone. He’s an honest person and does the right thing for Navy,” Puckett said. “When I was coming on board, I reached out to Tom about our strategy for the Army to move to the cloud, using common cloud and data services. Tom, having come from the Army and then in the CDO role at the Navy, recognized the Navy, like many in the DoD, were doing a lot of duplicative things with data and he was going to converge and combine. He and I also strategized around role of services and consumption of Advana and where there was a necessary convergence and divergence to curate data sets.”

Jason Briefel, the director of government and public affairs for the Senior Executives Association, said cutting SES positions is usually a bad idea because these are folks that bring continuity to any organization.

He said the Navy’s decision is just another example of the turmoil happening across DoD over the last three years because of this Congressional mandate.

“I think people realize the system may not be perfect, but to drive a bureaucracy like the Pentagon, you have got to know how to navigate it and make it work,” Briefel said. “Every time you take away a SES position a reorganization results. How many SESers are double or triple hatted as consequence of these actions? It’s not clear, but it seems to be strategy by agencies.”

While Briefel said he was not familiar with Sasala’s specific situation, member of the SES have little to no recourse when there are directed reassignments.

“But firing people for not moving across the country probably is not the best way to show support in the employment of the executive cadre,” he said. “SEA has talked to OPM about directed reassignments and it’s part of our agenda to change as it’s probably an antiquated relic.”

Puckett added that every service has been trying to get under the Congressional SES caps and SES positions are in high demand no matter the agency.

Few would argue that if Weiss or Franklin wanted to move Sasala out of the CIO’s office, it’s their prerogative to do so. That is the deal SESers make when they sign the paperwork. But it’s also clear there are ways to treat people that can accomplish the department’s goals without appearing malicious and punitive.

It’s a shame when the only way to get an agency’s attention on an acquisition problem is through a lawsuit.

Unfortunately, it’s an all too common occurrence with draft solicitations, final solicitations and post-award debriefings.

The latest example from the National Industries for the Blind, the Association for Vision Rehabilitation and Employment and the National Association for the Employment of People who are Blind against the General Services Administration epitomizes this problem.

NIB and its partners were left with no other options — and what they call an unfortunate step — but to file a protest with the Court of Federal Claims over GSA’s commercial platforms request for proposals issued in December.

Despite submitting concerns during the draft solicitation phase and writing a letter to GSA Administrator Robin Carnahan advocating for her help to change the RFP, it took NIB, AVRE and NAEP to take legal action for GSA to act.

Six days after the groups filed their protest, GSA issued a request for information asking industry for feedback on how to accomplish the goals NIB, AVRE and NAEP asked for in its initial comments.

“Filing this lawsuit is a last resort for NIB as we seek to protect the jobs of thousands of people who are blind working in our associated nonprofit agencies — jobs that are threatened by GSA’s Commercial Platforms program as it is currently structured,” NIB said in a statement. “NIB and GSA have a strong partnership that has created many employment opportunities for people who are blind over the course of decades. However, GSA’s Commercial Platforms program — which does not require platform providers to ensure compliance with purchasing laws related to the AbilityOne Program even though it requires compliance with other federal purchasing laws — threatens the jobs of thousands of people who are blind working in our associated nonprofit agencies.”

Compliance has been missing for years

At the heart of the protest and problem with the RFP is what NIB says is non-compliance with the Javits-Wagner-O’Day (JWOD) Act. The 1938 law mandates the AbilityOne Commission publish a procurement list that identifies commodities and services that the commission has determined are suitable to be furnished to the government by companies who employ people with disabilities. Agencies must buy these specific products and services unless there are specific circumstances that require exceptions.

NIB and its co-plaintiffs filed their lawsuit Feb. 2 just prior to the proposal due date of Feb. 3.

In the protest, NIB says GSA’s RFP does not require the same compliance with mandatory source requirements of the JWOD Act. Instead, the commercial platforms solicitation lets offerors either mark or restrict essentially the same (ETS) items on the platform or “have the ability to identify, highlight and promote AbilityOne products offered by authorized distributors.”

“In other words, the RFP will allow prohibited essentially the same items to be listed for sale on the commercial platforms and does not prevent their purchase by federal agencies in violation of the mandatory source requirements of the JWOD Act,” the protest stated.

NIB, AVRE and NAEP are seeking an injunction to stop GSA from going forward with the RFP as it’s currently constructed, and require GSA to modify the solicitation to require offerors demonstrate the ability to block the sale of all ETS items.

“Since 2020, we’ve worked hard to resolve this issue with GSA. Having exhausted our options and with GSA now seeking additional providers to be part of the Commercial Platforms program, we have no choice but to ask the courts to require that providers in the Commercial Platforms program comply with the JWOD Act just as they are required to comply with other federal purchasing laws,” NIB said in its statement. “While bringing this action was a difficult decision, we believe it is necessary to protect the employment of people who are blind in the AbilityOne Program.”

Congress required new models

An industry source, who requested anonymity because they do business with GSA and its customers, said the protest isn’t surprising as NIB has been concerned about the treatment of AbilityOne items since GSA kicked off the commercial platform program in 2020.

“NIB is technically, correct. The micro-purchase threshold rules are very specific in saying that mandatory sources are still mandatory, even at the MPT level,” the executive said.

An email to GSA seeking comment about the lawsuit was not immediately returned.

NIB said it has been working with GSA for several years to address their concerns about the commercial platform initiative. Three years ago, GSA made three awards in June  to Amazon Business, Fisher Scientific and Overstock Government to test out this commercial online platform concept. The three vendors developed or modified existing platforms to meet the government’s requirements. The goal is to better manage and capture the data around online spending that is already occurring so agencies can better understand where this money is going. The other goal that Congress focused on when it included the authority and mandate to set up the commercial platforms in the 2018 Defense authorization bill is to make buying of commercial products better, faster and cheaper — or more like Amazon.

During what GSA calls this proof of concept phase, agencies using the online platforms could buy commercial products below the micro-purchase threshold of $10,000. GSA initially estimated the overall market to be $6 billion, but scaled it back to $500 million in 2021.

Congress in the 2022 defense authorization act required GSA to test out other approaches beyond the current one, leading to the new acquisition effort, which started in March 2022 with a request for information, followed by a draft RFP in September and a final one in December.

NIB says despite its efforts to work with GSA, the evidence showing the impact of the commercial platform effort on companies that employee people who are blind or visually impaired is clear.

NIB told Carnahan in its October letter that the proof of concept confirmed that the new program was not complying with the JWOD Act’s mandatory sourcing requirements. AbilityOne purchases accounted for 2%-to-4% of the total dollar value of sales under GSA Advantage! and 9%-to-10% of the total value of sales under all GSA purchase vehicles, but AbilityOne purchases were less than 1% of the total value of sales on the commercial platforms.

“This loss of sales is compounded by an increase in sales of ETS items. NIB estimates that less than 1% of the value of sales through GSA controlled contracts (e.g., GSA Advantage!, GSA Global Supply and GSA eBuy) result in non-compliant purchases of ETS products rather than the mandatory AbilityOne products, i.e. lost sales for AbilityOne qualified nonprofit agencies (NPAs),” NIB and the others wrote in the letter to GSA. “Under the current commercial platforms, however, NIB estimates the percentage of non-compliant sales in direct violation of the JWOD Act is at least an order of magnitude higher at approximately 12% of the total dollar value of sales on the platforms.”

In both the letter to Carnahan and in the protest, NIB highlighted the fact that GSA’s other portals, Advantage and the schedules e-Buy could block and substitute if agencies tried to buy non AbilityOne or ETS items.

In fact, in GSA’s response to NIB’s letter, it acknowledged this capability as part of how it ensures compliance with the JWOD Act. But instead of ensuring the commercial platforms were doing the same, GSA explained that it instead “relies on ongoing education, training, and enforcement by agencies” for JWOD Act compliance.

In the end, GSA’s RFI is asking exactly how industry can block ETS products from appearing, block and substitute for AbilityOne products or if there other capabilities that exist to meet the same end goal. Vendors have until Feb. 23 to respond to the RFI.

“The purpose of this RFI is to understand the feasibility and legality of certain changes to the solicitation that are being sought by the plaintiffs. Responses to this RFI will be used to assist the government in determining whether the current RFP should be left unchanged, amended, or canceled,” GSA wrote. “This RFI does not promise or commit the government to any particular course of action or to make award to any party, nor will it impact any existing proposals received.”

If GSA ends up modifying or even canceling the procurement, it would be an all too common result that vendors see far too often across the federal community — an issue that the agency should’ve addressed early on in the process, but instead cost industry time, money and frustrations. And this all could’ve been avoided if someone in GSA would’ve just taken a more pragmatic approach to solving this challenge rather than what looks like GSA just dug their heels in.